Some voices had already whispered that Apple was preparing some pricing changes on its desktop operating system, but Craig Federighi surprised many of us yesterday – I think – when he announced that Mavericks will be available as a free upgrade. The news that the iLife and iWork suites are going free just topped yesterday’s announcement, although there are certain conditions for getting those free productivity apps.
Apple’s move to make the aforementioned software free is interesting, and obviously prompts the question why? The company was charging $29.99 for its previous versions of Mac OS X such as Mountain Lion, and another $15 for each iWork app for Macs, and $10 for iOS. iPhoto, GarageBand, and iMovie are another story: they cost only $5.
So, what happened? Why did the company choose to provide freemiums, while Microsoft still requires you to pay $200 for Windows 8.1 Pro?
BusinessWeek speculates that by going free Apple has acknowledged something that’s been true in the tech industry for years: software is a means to sell hardware. By allowing anyone with a Mavericks-compatible Mac to run the latest desktop operating system, it opens the door to a painless and free upgrade, because they want you to run their latest software. Tim Cook emphasized during the WWDC 2013 keynote that only a small fraction of iOS users run pre-iOS 6 versions.
Apple wants to achieve the success it had with its iOS 6 adoption in the Mac OS X field, and by making iLife and iWork free of charge, Apple’s goal of the perfect integration of software and hardware can be achieved even faster.
Of course, offering iWork, iLife suites, and Mavericks as free upgrades will shake Microsoft’s business model, which is interesting from both the consumer and enterprise perspectives. The purchasing price of a Windows PC can’t be compared to that of a Mac: A laptop running Windows can be yours for only a fraction of the $1000 entry-level price of a Mac laptop. From this perspective, Microsoft has no reason to fear Apple’s move.
However, the picture looks different in the long run: While five-year-old PCs struggle to meet the performance requirements needed to accomplish everyday tasks, Macs still perform well even in their later years. And secondly, both the consumer and corporation won’t need to invest a dime into new software during this timeframe, because it can always get the latest and greatest software without any hassle.
Still, Apple has a long way to go to, because Microsoft has a strong grip on both the consumer and enterprise markets, through Office. But, by deciding to drop the iWork, iLife, and Mac OS X revenue stream and make all of them available for all eligible users, Apple will certainly cause a headache for Microsoft.